News, Research & Insights for American Homeowners, Patriots & Constitutional Conservatives
Initial jobless claims back to Q1 levels.
There seems to be no more fertile area for statistical misinterpretation than with unemployment numbers. We saw this last week with the monthly jobless report, in which a 0.4% drop in the topline unemployment rate occurred even though the economy only added 120,000 jobs, which would only cover the average population growth, while almost three [...]
Dude?
We still have a long way to go in sorting out the pressing issues facing the nation, and we don’t all agree on the solutions. Foreign policy questions abound, our energy policy is a mess and we still need to bring down those unemployment numbers. But at least there’s one thing we’ve managed to nail [...]
Dude?
We still have a long way to go in sorting out the pressing issues facing the nation, and we don’t all agree on the solutions. Foreign policy questions abound, our energy policy is a mess and we still need to bring down those unemployment numbers. But at least there’s one thing we’ve managed to nail [...]
Nanny state hiring nannies?
Amid swirling speculation over whether Barack Obama will “go big” in his plans to address stagnant unemployment numbers, some liberal supporters of the president have been pitching a plan which would call for the federal government to hire up to a million people directly. Not that we wouldn’t like to see a million Americans employed, [...]
Nothing in this current economy makes any sense. The stock market should not be humming along….and I don’t even trust what that means anyway. Wall Street should not have reported its fourth most profitable year on record in 2010. Our unemployment numbers quoted are wholesale lies. Real people in this country are hurting like no time since the Great Depression. The economics that led up to the real estate crisis were not plausible to anyone with a 5th grade education. And things are not getting any better. So what is going on in this country? One potential explanation is that we are already at war and our impotent government is trapped, unable to formulate a strategy to response to this new war.
First Read the Newspaper Accounts of Emerging Information About Financial Terrorism HERE
Serious risks to the global economic system were exposed by the crisis of 2008, raising legitimate questions regarding the cause of the turmoil. An estimated $50 trillion of global wealth evaporated in the crisis with more than a quarter of that loss suffered by the United States and her citizens.
A number of potential causative factors exist, including sub-prime real estate loans, a housing bubble, excessive leverage, and a failed regulatory system. Beyond these, however, the risks of financial terrorism and/or economic warfare also must be considered. The stakes are simply too high for these potential triggers to be ignored.
The preliminary conclusions of the research suggest that, without question, there were actors who had the motive to harm the U.S. economy. These motives can be categorized as both economic and non-economic. In addition, these same actors have clearly demonstrated the means to carry out such an attack. Finally, the opportunity was clearly present given the existing economic condition and regulatory framework in operation.
The hypothesis under consideration is that a three-phased attack is underway with two of those phases completed to date.
The first phase was a speculative run-up in oil prices that generated as much as $2 trillion of excess wealth for oil-producing nations, filling the coffers of Sovereign Wealth Funds, especially those that follow Shariah Compliant Finance. This phase appears to have begun in 2007 and lasted through June 2008.
Economic Warfare: Risks and Responses
The rapid run-up in oil prices made the value of OPEC oil in the ground roughly $137 trillion (based on $125/barrel oil) virtually equal to the value of all other world financial assets, including every share of stock, every bond, every private company, all government and corporate debt, and the entire world‘s bank deposits. That means that the proven OPEC reserves were valued at almost three times the total market capitalization of every company on the planet traded in all 27 global stock markets.
The second phase appears to have begun in 2008 with a series of bear raids targeting U.S. financial services firms that appeared to be systemically significant. An initial bear raid against Bear Stearns was successful in forcing the firm to near bankruptcy. It was acquired by JP Morgan Chase and the systemic risk was averted briefly. Similar bear raids were conducted against various other firms during the summer, each ending in an acquisition. The attacks continued until the outright failure of Lehman Brothers in mid-September. This created a system-wide crisis, caused the collapse of the credit markets, and nearly collapsed the global financial system.
The bear raids were perpetrated by naked short selling and manipulation of credit default swaps, both of which were virtually unregulated. The short selling was actually enhanced by recent regulatory changes including rescission of the uptick rule and loopholes such as ―the Madoff exemption.‖
While substantial, unusual trading activity can be identified, the source of the bear raids has not been traceable to date due to serious transparency gaps for hedge funds, trading pools, sponsored access, and sovereign wealth funds. What can be demonstrated, however, is that two relatively small broker dealers emerged virtually overnight to trade ―trillions of dollars worth of U.S. blue chip companies. They are the number one traders in all financial companies that collapsed or are now financially supported by the U.S. government. Trading by the firms has grown exponentially while the markets have lost trillions of dollars in value.‖1
The risk of a Phase Three has quickly emerged, suggesting a potential direct economic attack on the U.S. Treasury and U.S. dollar. Such an event has already been discussed by finance ministers in major emerging market nations such as China and Russia as well as Iran and the Arab states. A focused effort to collapse the dollar by dumping Treasury bonds has grave implications including the possibility of a downgrading of U.S. debt forcing rapidly rising interest rates and a collapse of the American economy. In short, a bear raid against the U.S. financial system remains possible and may even be likely.
The recent seizure of $134 billion face value in supposedly counterfeit U.S. Federal Reserve bonds underscores the reality of the economic threat. This may be as significant as the Japanese radio intercepts were before December 1941.
Immediate consideration of the issues outlined in this report is vital. Further study is essential and prospective responses must be crafted to address future risks. Finally, there are legitimate questions about the performance of the regulatory regime and Wall Street institutions. Implications that these parties have been complicit or otherwise co-opted cannot be ruled out. Therefore, it is strongly recommended that this study and any task-force response be conducted outside of traditional Washington and Wall Street circles.
―This paper outlines a theory concerning why Muslim terrorists attacked the World Trade Towers on Sept. 11, 2001, bombed London‘s subway during the G-8 economic summit on July 7th, and detonated blasts in an Egyptian resort on 23rd July. The reason for these attacks was to create „Economic Terrorism.‟ Economic Terrorism is defined here as the attempt to assault and destroy a foe through decimation of the enemy‟s tax base via rank economic sabotage. Such attacks on economic infrastructures lower net tax yield, thereby shrinking the capital pool for military spending. There is historical warrant for the belligerent use of strategic economic destruction. This is detailed in an iconoclastic book on the Roman Empire‘s demise, by peerless Orientalist Henri Pirenne, called ‗Charlemagne and Muhammad‘ (1943). This work challenged Gibbon‘s thesis that Germanic barbarian assaults doomed Rome, posited in the Decline and Fall of the Roman Empire (1776). As we shall see, ‗Economic Terrorism‘ is the most potent weapon for Muslim radicals can deploy in their siege against the West. There is hard evidence Islamicists employed Economic Terrorism on Sept. 11 to mangle the US economy, which vicariously damaged the tax base. By extension, this was meant to prune U.S ability to pursue aggressive foreign policy, mount defense and wage war. Radical Islam has long reacted with ambivalence and rage towards capitalism. Framing this debate is a larger ideological struggle, pitting ‗atheistic‘ Western capitalistic economics against the Islamic idee fixe – the formulaic Muslim theocracy. Accordingly, a famous radical Muslim intellectual felt that, ―…democracy is a form of idol worship. So, too…capitalism, which is…is a form of idolatry.‖ We now know Al Qaeda was fixated on casing New York financial institutions for years before they attacked. If Islamic terrorists further pursue Economic Terrorism without an organized Western response, the impact upon economy and tax-derived defense will be massive. Also, such attacks won‟t be isolated, but recurrent — given the small cost of assaults and massive potential reward. Therefore, we must study Economic Terrorism and prepare an answer. Ultimately, as the poor and overmatched Islamic terrorists pursue their struggle against the West, they realize this is the best „small war‟ strategy of all
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The Great Unwind and the Final Redemption
by O. Max Gardner
What we are experiencing is called the global credit crisis for a reason. There is too much debt in the world. There is too much oil in the Gulf of Mexico and too little oil in the rest of the world. What used to be up now seems to be down. The stock market is going up on Monday and dropping more than 1,000 points Tuesday afternoon. The economy is in a “recovery mode” but the unemployment numbers keep going up and up and up. What is wrong with these pictures?
More and more economists are talking about the threat of a deflationary crisis ahead. Some are discussing hyperinflation. Others refer to a “double-dip” recession. A few even predict another depression. What we know for sure is that Greece, Italy and Spain are broke. The Euro has lost more value than the latest big fish just lost in Vegas. Foreclosures are at historic highs and unemployment keeps going up.
So, what does this mean for you? Well, if you have a house that is under water, or more debt than you can reasonably hope to repay, your best options may be the unthinkable as in filing for personal bankruptcy. But it really should not be unthinkable to default on a loan or even to declare bankruptcy. Don’t stop reading. It is really a good option for many; it is moral, legal and good for the country. It has also become very common. You and your children will look back in a generation with pride.
In small amounts, debt is good. Home ownership is only possible for the young with mortgages, and many college degrees seem to be totally supported with student loans (don’t get me started on student loan debt). Working capital for growing businesses allow for inventory and distribution expenses. Lenders benefit as well: high interest rates are paid to pensioners on their life savings.
When debt exceeds a certain level it becomes a cancer on society. Easy credit fuels speculation which triggers bubbles. These bubbles lead to a temporary lift in apparent wealth, which increases economic activity beyond its sustainable level. But eventually more and more debt triggers economic decline with the inevitable glut of goods produced by an overheated economy.
What people are discovering too late is that their debt is not repayable. Not now, not in the future, not ever. They once had a hope they could wait out their bad times. This is true of many homeowners, many businesses and many governmental bodies. The “great unwind” is now upon us and is picking up reverse speed every day. And, the unwind is going to be deflationary. Prices and salaries will decline, jobs will become more scarce, and debt will continue to increase.
The earlier you pull the rip cord the better off you will be later. In many states mortgage loans are non-recourse debts. This means that the homeowner has no personal liability for the debt after foreclosure. Never make another mortgage payment in these states. Turn over the keys after foreclosure. You will lose all of your down payment, but the lender can never get another penny from you. Your credit score will fall. But you do not want any more credit. Right? If you are trying to quit crack, how would feel about your pusher reducing your crack score? Does that make sense? If you plan to fight the war on drugs, you fight to win, right? Stay off crack (I mean credit) for a few years, and they will take you back with open arms. Just be sure to look before you leap back into the credit patch.
There should no longer be any moral question about whether it is wrong to walk away from debt legally. The advent of limited liability corporations and the legal ‘personhood’ of corporate shells have allowed business to create one sided bets for years, and they happily walk away from “corporate debt” when the tide shifts. Donald Trump, the famed “Donald”, surely knows how to play this game. The Donald is a credit gamer. Whatever you say about Trump, the guy is a real player at in the debt cancellation game. This may even be the basis for a new show—The Bankrupt.
But, Trump is not the exception to the rule. The Trumpum tactics are the calculus of 21st century finance, and you are a bit player in this game. The Big Players are General Motors, Chrysler, Lehman Brothers, Bear Stearns, Washington Mutual and Countrywide. They have either eliminated their heavy debt-loads by bankruptcies or by forced liquidations and mergers with the FDIC picking up the financial pieces. And, even the Great Mortgage Bankers Association of America recently accepted a $40 million dollar short sale and walked-away from its former world headquarters on K Street in Washington along with about $45 million in unpaid debt. If you want to talk about moral hazards, then these are the players to talk about. Forget about John and Mary Smith on Main Street. John and Mary are mere pebbles in the sand on a very large beach. Nobody notices John and Mary and from my point of view nobody in Washington really cares.
The current administration is implementing a policy of recapitalizing the banks (whose assets are still worth far less than their own debts) by lending them money through the Fed for nothing and borrowing back the money through the treasury for a lot more. This is called transferring debt from the banks to the government. But government debt has the same drag on societies in the long-run, they can just hold their breath longer. And, the so-called HAMP program is nothing more than a smoke and mirrors game designed to make us think that something is being done when in fact nothing is happening other than secretly extending the day of the final reckoning. In short, there is no value in the Net Present Value Test of HAMP.
In the end debt default always occurs in these situations. The debts cannot be paid by the combined debtors in a society. The default may occur when inflation destroys the value of the debt over time. Or the default may occur with the eventual death of the debtor. Or the debt is discharged legally.
The longer this process takes, the more damage occurs to the society. And this process, in my view, is the true moral hazard for America. The hazard of not legally and effectively dealing with these mountains of consumer debt. There are strange incentives that a person has when their debt is unpayable. Why would you try to earn more? The more you earn the more debt you pay. But you cannot earn enough to get out of debt. So you stop trying. If you owe too much on your house, you might decide you have nothing more to lose on your house so you will simply decide to wait it out. You will minimize the repairs and improvements on the house, rent the house out to frat boys and hope for the best. You might as well best your nest-eggs on winning the Power Ball next Wednesday. The odds are not in your favor. The wait it out strategy will only prolong the financial and emotional agony.
The banks are great examples of distorted incentives. They have sucked up well over $3 trillion of government money. They are still paying huge bonuses. They are not lending to businesses in need. They are not lending to consumers. They have “raised” their consumer credit standards. They have not changed any of their prior internal “standards.” Distorted incentives indeed.
In the ancient days the Christian nations would have a debt Jubilee every 30 years. It sounds like a party because it was. Debts were forgiven en-masse when societies became constipated with debt. And, in the days of the Old Testament, individual debts were discharged once every 7 years. It was also considered a sin to try and collect debts after this 7 year discharge.
Suffice it to say we are currently a nation of many, many sinners, the vast majority of whom are trying to collect debts owed by consumers. The only way to run these money changers out of the temple, and to secure true redemption, is to declare personal bankruptcy. You need to legally purge yourself of your debts and your houses and your expensive cars and start working for yourself and for your family. Praise the Lord and pass around those bankruptcy petitions. Like now. Like yesterday.
O. Max Gardner III
Here’s a link to my similar article at EZinesArticles.com: http://ezinearticles.com/?Mortgage-Hardship—Solutions-to-Avoid-Foreclosure&id=2710389
If you are facing a hardship with making your mortgage payments, you’re not alone. The national foreclosure rate is now at one in every 555 households. If you live in the Ft. Myers/Cape Coral area, that statistic jumps to 1 in every 18 households now in foreclosure.
A mortgage hardship is very common with unemployment numbers rising daily and US homeowners losing the values in their homes on a monthly basis as well
When someone loses their income they go through all sorts of emotions when they cease to have the ability to pay their bills. Fear can easily be all-consuming when facing a mortgage hardship and foreclosure.
The first thing I tell my clients is to not be afraid. Fear can take a root in our lives and cripple us from taking action and acting wisely.
Don’t cave in to the fear tactics of your mortgage servicer or lender – or any other creditor for that matter. You’re still in control even though you may not feel like it.
There are precise steps you can take to protect yourself and your interests. There are legal rights that you possess and can use to help yourself in difficult times. The biggest challenge is that most American consumers and homeowners don’t know they have legal rights. You have foreclosure rights…when you’re facing a mortgage hardship, all hope is not lost.
We have helped families stay in their home for an extra 6 months, 8 months and over a year. We never provide a precise time frame or outcome. There are so many variables… if you have a company giving you a bunch of promises and charging a lot of money upfront for now finite service, be extremely wary and cautious.
Another very likely issue is that the financial institution attempting to collect and/or foreclose doesn’t even own your loan or have the legal right to collect. Over 80% of all foreclosures filed in Florida right now contain a “Lost Note” count alleging that they (the plaintiff) have lost the most important document as evidence of the debt they claim you owe – the Note
There are several affirmative defenses that a qualified and competent foreclosure attorney will know how to bring in your case.
A TILA mortgage rescission may be something that you can assert if there are material disclosure violations found in a forensic loan audit of your loan documents. Obtaining a true forensic loan audit is probably the best first step you as a homeowner in mortgage hardship can take.
A forensic loan auditor will truly break down the entire package of loan documents and examine them for state and federal loan violations along with a forensic examination for fraud and failure to disclose, appraisal fraud and loan application and underwriting fraud.
Be certain that you are truly dealing with a reputable and knowledgeable auditor. I find that a very select few of us really know what to look for and truly know the laws. So many people will tell you what you want to hear without preserving integrity and honesty.
There is a litany of scams out there so be careful. Take your time, ask questions, find a professional who will help and educate you. Knowledge is truly power. The more you know and understand your foreclosure rights, the better off you’ll be.
Quantified violations of the Truth in Lending Act (TILA) and other federal violations can be used a Claims in Defense by Recoupment in any foreclosure action brought against you. A forensic loan audit (done right) is highly valuable for you.
You’ll land on your feet. You’ll make it through this tough time. Be a sponge for information, read it with common sense in mind and find a person or two who can be your mentor or advisor through this time. You’ll make it… I promise.
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